US IPOs Sputter as Average Return Plummets to 10% in 2025

The US stock market's recent pullback has taken a toll on initial public offerings (IPOs), with many newly listed companies experiencing a significant decline in their stock prices. According to data, the average IPO return in 2025 has plummeted to a mere 10% compared to 2024's 25% return. This downturn is particularly concerning for companies still waiting to go public, as it may deter them from listing their shares in the current market. The financial details paint a grim picture. Recent IPOs such as Gemini Space Station Inc., Fermi Inc., Navan Inc., and Stubhub Holdings Inc. have seen their stock prices drop below their initial public offering (IPO) prices. Even high-flying debuts like CoreWeave Inc., Circle Internet Group Inc., and Figma Inc. have faced a brutal correction, with their stock prices declining by as much as 30% in recent weeks. This trend is a stark contrast to the market's performance in 2024, when many IPOs saw their stock prices soar. The market impact of this downturn is multifaceted. The decline in IPO returns is a reflection of the broader market's volatility and the increasing skepticism among investors. The recent pullback in the US stock market has led to a decrease in investor confidence, making it more challenging for companies to raise capital through IPOs. This, in turn, may lead to a decrease in the number of IPOs in the coming months. The companies that have recently gone public are primarily in the technology sector, which has been one of the most affected by the market's downturn. Gemini Space Station Inc., a space technology company, has seen its stock price decline by 25% since its IPO. Fermi Inc., a biotechnology company, has also experienced a significant decline in its stock price, dropping by 30% in recent weeks. Navan Inc., a software company, has seen its stock price decline by 20% since its IPO. The decline in IPO returns has significant implications for the companies that are still waiting to go public. A prolonged downturn in the market may lead to a decrease in the number of IPOs, making it more challenging for companies to raise capital. This, in turn, may lead to a decrease in innovation and job creation, as companies may be less likely to invest in new projects and initiatives. Looking ahead, the outlook for IPOs remains uncertain. While some analysts predict a rebound in the market, others are more pessimistic, citing the ongoing economic uncertainty and the increasing skepticism among investors. The recent pullback in the US stock market has highlighted the need for companies to be more cautious when listing their shares. Companies must carefully consider the timing and pricing of their IPOs to ensure that they are able to raise capital at a fair price. In conclusion, the recent decline in IPO returns has significant implications for the US stock market and the companies that are still waiting to go public. While the market's volatility is a natural part of the business cycle, the decline in IPO returns is a reflection of the broader market's uncertainty. As the market continues to evolve, companies must be prepared to adapt to changing market conditions and be more cautious when listing their shares.